Back to top

Image: Bigstock

Palo Alto Networks (PANW) Stock Sinks As Market Gains: Here's Why

Read MoreHide Full Article

Palo Alto Networks (PANW - Free Report) closed at $339.90 in the latest trading session, marking a -3.13% move from the prior day. The stock fell short of the S&P 500, which registered a gain of 0.32% for the day. Meanwhile, the Dow gained 0.3%, and the Nasdaq, a tech-heavy index, added 0.66%.

Coming into today, shares of the security software maker had gained 10.58% in the past month. In that same time, the Computer and Technology sector gained 4.08%, while the S&P 500 gained 3.34%.

Investors will be eagerly watching for the performance of Palo Alto Networks in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on September 1, 2026. The company's upcoming EPS is projected at $0.98, signifying a 3.16% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.35 billion, up 32.1% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $3.78 per share and revenue of $11.42 billion, which would represent changes of +13.17% and +23.85%, respectively, from the prior year.

Investors should also take note of any recent adjustments to analyst estimates for Palo Alto Networks. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.08% higher within the past month. Palo Alto Networks is currently a Zacks Rank #2 (Buy).

With respect to valuation, Palo Alto Networks is currently being traded at a Forward P/E ratio of 85.46. This represents a premium compared to its industry average Forward P/E of 44.64.

One should further note that PANW currently holds a PEG ratio of 6.44. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Security industry had an average PEG ratio of 2.92 as trading concluded yesterday.

The Security industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 32, finds itself in the top 14% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

Published in